Real Estate Terms F-Z (part 2)

Freddie Mac: Federal Home Loan Mortgage Corporation (FHLMC), or Freddie Mac, is a government-sponsored mortgage lender used to expand the United States housing market since its inception in 1970, buying mortgages then pooling and selling them to investors on the open market as mortgage-backed securities.

GFE: Good Faith Estimate provides buyers with an idea as to closing costs along with the terms of the mortgage loan should they be approved by the mortgage lender.

Lien: A legal claim made against a property that has to be met in the event one wants to sell the property. Liens can be from the government over unpaid taxes, lawsuits or judgements against the homeowner, unpaid attorney’s fees, etc.

Lock In Rate: Or Rate Lock, meaning the promise made by the lender that guarantees the loan rate and terms.

MLS: Multiple Listing Service—the database of all the property for sale in a particular area.

PITI: Principal, Interest, Tax, Insurance or your mortgage payment. The principal pays down the loan, the interest goes to the lender for having made the loan, taxes and insurance go into an escrow account each month to pay annual property taxes (county and/or city), and homeowners insurance.

PMI: Private Mortgage Insurance or insurance premiums that mortgage lenders require buyers to pay as part of their monthly payments that would help reimburse the lenders should the buyers default on their loans.

Settlement Statement: The document that includes the financial details of the sale at closing to include closing costs.

TILA-RESPA: Is an integrated disclosure comprising two Acts. Since 1968 the Truth-in-Lending Act has been protecting consumers in dealings with lenders and creditors. Since 1975 the Real Estate Procedures Act has been protecting consumers by better informing them about types of charges they pay at closing.

Title: The document that proves ownership of a property on file as public record in the county where the property is located.

TRID: TILA-RESPA Integrated Disclosure rule, or the “know-before-you-owe rule” (amerifirst.com), began in October of 2015 in an attempt to help borrowers better understand all the terms of their home loans.

Walkthrough: The buyer’s final inspection of the property prior to closing, making sure all the conditions of the sale have been met.